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Since its inception in 1969, the Nobel Prize in Economics
(technically “The Bank of Sweden Prize in Economic Sciences in
Memory of Alfred Nobel”) has been an important catalyst for
research agendas in economics and other academic disciplines. Thus,
when libertarians have been awarded the prize, there has been a
remarkable resurgence in free-market ideas. Three Nobel Prize
winners in particular have identified themselves with
libertarianism: F.A. Hayek, Milton Friedman, and James
Buchanan.

The first libertarian to receive the Nobel Prize was F.A. Hayek
in 1974. In the years leading up to the prize announcement, Hayek
had reached a professional and personal nadir. Unable to maintain
an appointment in the United States, Hayek had returned to Austria
to take up a position at the University of Salzburg, Austria. With
the announcement of the prize in 1974, however, Hayek’s work, and
the fortune of Austrian economics, took a remarkable turn.

Hayek’s influence on Cato is profound. Two of Cato’s first books
were by Hayek: A Tiger by the Tail: The Keynesian Legacy of
Inflation & Unemployment and Monetary Policy:
Government as Generator of the “Business Cycle.” Perhaps more
than any other intellectual in the twentieth century, Hayek has
inspired Cato and its researchers to develop policies that ensure a
free society. When Cato moved into its current location in 1992,
its auditorium was named in Hayek’s honor.

Two years after Hayek’s win, Milton Friedman, then a professor
at the University of Chicago, was awarded the prize for his work on
monetary theory. This work, along with that of Hayek, was to form
the basis of Cato’s advocacy of stable money and inspired Cato’s
first conference on monetary policy in 1983. Participants included
Fritz Machlup, Anna Schwartz, Gottfried Haberler, future Nobel
Laureate Robert Mundell, and Allan Meltzer.

One year before the massacre in Tiananmen Square, Cato held its
first conference in China, “Economic Reform in China: Problems and
Prospects,” at which Friedman spoke. A collection of papers
presented at the conference was published in English in 1990, but
it remained blocked by the Chinese government until 1993, when
Friedman met with then Communist Party leader Jiang Zemin.

Libertarians have always known that government often fails, but
before the pioneering work of James M. Buchanan, why government
fails remained somewhat of a mystery. His Nobel Prize in 1986 gave
recognition to the already growing movement in “Public
Choice” economics, which provided a lens through which to
analyze these failures.

For much of his life, Buchanan was an active partner with the
Cato Institute. He spoke at numerous Cato events, including the
10th anniversary dinner in 1987 and its 1990 Russian conference,
“Transition to Freedom: The New Soviet Challenge.” In addition,
Buchanan often wrote for the Cato Journal.

A frequent lament amongst libertarians is the number of talented
individuals who never received the prize. Fritz Machlup, for
example, was a leading theorist in the pure theory of international
trade. Ludwig von Mises was one of the most pioneering economists
of the twentieth century. Peter Bauer contributed vast scholarship
to the literature of development economics. Gordon Tullock,
Buchanan’s partner in the creation of Public Choice, did pioneering
work in the field of rent seeking. Israel Kirzner may still win the
Nobel Prize for his essential work on entrepreneurship and the
market process.

For a more detailed biography of Nobel Laureates who have worked
with Cato, click the individual links below.